Is Quality a Push?
Through most of the last twenty years of the industry, the unrelenting push for quality supremacy was a constant headline in gauging product success and brand respect. But with the rising costs of energy and global awareness of climate change, it seems quality has drifted into the background of the discussion in favor of technology and fuel economy leadership. Is quality now simply a given, or is it still a differentiator in the market? And what determines quality? Is it performance in external “things gone wrong” measurements, such as the J.D. Power and Associates 2008 Initial Quality Study (IQS) or is it how the vehicle is perceived by the customer in areas such as fit and finish? These are important, but I suggest quality is about much more.
To be sure, it’s almost impossible to find “a bad car” with respect to quality. With the J.D Power IQS number, for instance, we’re talking differentiation in scores for “problems per 100 vehicles” of a fraction of a point in looking at simply 'average' cars to the best in the survey. On perceptual quality, I think things get a bit trickier. As pricing pressure and high material costs squeeze manufacturers, the temptation is to take costs out and to cut corners. To me, this is a no-win strategy. Mark Adams highlighted the importance of details in his recent post about the interior design on the new Insignia. The materials, fit, finish and attention to detail convey quality in every respect. I’m convinced this effort will pay off with higher consideration, better pricing performance and long-term brand equity benefits. The good news for GM is that these types of efforts are now the norm for our product development and design community, not the exception. But it hasn’t always been this way.
It’s taken some time and it’s still an on-going process, but the culture of “good enough” has pretty much left GM. Quality is not just about good process; it’s a foundation of the culture of the company. When I was at BMW, no matter where you worked – even if you were the second-ranking librarian in the corporate library—you strived to be the very best person in the industry at your position. It wasn’t something you preached, or had to remind people about, it was simply how most all employees viewed themselves. I think that passion bled through to all the products it created. At GM, I’ve found some of the most talented and inspiring people I’ve ever worked with, but the culture in the past always seemed to come up with a “simply OK” mindset. That’s not to say that GM hasn’t done outstanding products in the recent past, but if we’re honest, the sum total of the parts was not always compelling.
But today, I see a level of excitement and passion that is infectious. Our engineers and designers are pushing the envelope and reaching beyond even their own expectations to deliver product excellence at all levels. And importantly, this passion is finding its way into all parts of the business within GM. Our biggest leadership challenge is to foster and build this quality culture as we push through the current industry headwinds to build product momentum. Quality is about far more than just the metrics in the surveys - it’s a mindset that must drive the company.
Carl-Peter
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- Posted in Carl-Peter Forster |
- Comments (7)
Comments (7)
Barnaby Page said:
Good morning. I live in South Carolina, US and drive a 1988 Range Rover. (No, thats not a type-o). For the first time i am now looking forward to owning a GM Volt. I have traveled much, lived in Europe and have been waiting for the market to come to USA. The high price of gas has finally done it!
I agree with the post that the differentiators are less important, at least during this transition period of 10 years. It will take that long to get to a stable and thriving electric and/or hybrid market where those vehicles are the majority on the road. But make no mistake, whoever grabs the opportunity can survive. GM needs to embrace the electric and hybrid market with as much production capacity as possible. Discontinue or convert all current lines that cannot support the electric and hybrid vehicles.
Thats insane! No. Thats the disruptive effect of markets and consumers and you cannot fight this tide, so better to profit from it. Every person that i talk to will shed their expensive SUV or luxury car to get out from the grip of high oil, without exception. This is across the income scale and into the high net worth. Would they buy a Volt? Yes! Not only would they buy one but if they could forego gas prices, they might buy it on credit if they couldnt afford it for cash. With the price of gas, a monthly car payment is not so bad.
What about investors in GM...do they lose if GM scraps its legacy if it cannot convert them to electric hybrid? NO! My wife drives a 1994 Cadillac sedan de ville (yes, we drive old cars) and she loves it. If not for the gas prices, she would probably buy the 2009 when her caddie stopped running (if?). But, now with gas prices, she too will migrate to an electric and/or hybrid. The landscape is not just shifting, this is like the beginning of the game. GM investors could view their stock more like a biotech or drug stock play, where the future sales of autos will more than make up for the current losses in operations costs. Think about it...right now, all the talk is about low sales and high costs...but if GM changes the discussion to the future..what will the analysts talk about? Debt service most likely but still, they would say its a bold initiative to resurrect a once great innovator. I think the stock would recover and be in the teens through 2009.
One closing thought...last week my dad told me in 1935 he used get a ride with his father in the paper dompany delivery truck. He says it was huge and had solid rubber tires...they would drive around all day making paper deliveries. It was an electric truck! GM must lead us and not wait for Toyota or the emerging Chinese F6E on lithium ion batteries to take their market share. Disruptive technology leaves nothing but losers in its wake...holding onto once profitable customers and markets...both of which no longer exist.
Craig Daitch said:
As someone who until recently lived their entire life in Detroit, the automotive business was ingrained not only in our culture but our DNA.
While the thought of owning a Toyota probably crossed our minds once or twice, we set aside our interest for loyalty to General Motors. What did that get us?
3 Pontiacs in 5 years. Two Grand Am's with blown transmissions and 1 Grand Prix that died with 70,000 miles on the odometer.
Enter the Honda era in our house.
Fast forward to today, and I am the current owner of a 2008 Cadillac CTS. The car is beautiful and you can tell GM paid attention to details: the stitching on the dash and seats is perfect, there are 0 gaps on the body, it's a solid, well put together vehicle.
But even as tight as the car seemed, I still had 2 months of mechanical gremlins to deal with before the car was "worry free". The irony? One of those gremlins was Onstar shorting out the battery.
So what's the point of my story? I don't know if there is one, except for this nugget: In 2002 I remember sitting in GM HQ with a senior person on the communications team discussing an initiative I was to help build. I sat attentively as he filled the room with anecdotes from a previous life at another car manufacturer. Joking about quality he became very serious and said, "In my best estimation, it will take 2 lifecycles of any vehicle to change consumer opinion on perception of quality."
If you look at where Hyundai is today verses where they started with the Scoop...and you look at how GM is struggling to gain the respect of consumers with decent quality vehicles, you begin to realize, maybe GM should've ate its own dogfood and listened to its own employees...
Gereon Langlitz (Germany) said:
Dear Craig,
interesting comment so far. However, perception also is significantly influenced by the media. I'll give you an example. When I recall the 90s, the newspapers over here in Germany only used to be focused on Opel's supposed quality-issues, such as corrosion. But you never could read any word about the very similar problems of its main-competitor Volkswagen. I can assure you, a 3rd generation VW Golf does NOT AT ALL show less corrosion than the Opel Astra, which entered the market simultaneaously. You easily can recognize the rust bubbles at the back-window when you are standing behind such a VW Golf at the traffic-lights. But the media always pretended that VW's quality is just perfect. That's ridiculous, when I am hearing all the complaints from VW-drivers I know.
In my opinion the situation in the US is pretty similar. Here it's not Opel/VW, there it is GM/Japanese competition.
So GM should go on and strive to further improve its reputation at the media.
Of course all the steps to improve design and quality of GM-vehicles have been necessary. There also is a saying: "Whoever stops to improve, stops being good". But at the same time there's some exaggeration as well. I am driving an LPG-fueled 2001 Olds Alero, which used to be sold under the Chevrolet-brand over here. However, with this car I was far from having all these troubles, which my uncle encountered with his Mercedes E-Class...
A. Woodruffe said:
Another issue with quality is how an individual customer perceives it. Someone may buy a Chevrolet and not be that fussed if the radio stops working or the central locking fails to function. They take it to their dealer, get a reasonable level of service and they are happy. Someone who pays a premium for their vehicle will have there dealer strip the car until the mechanic finds that faint rattle. No warranty expenditure will ever cover the time for the dealer to locate and fix the problem however; the dealer is duty bound to offer that level of service and with a smile. I'n my experience the problem is that once a vehicle ends up at a dealership more than 3 times with various niggles, the damage has already been done and you are left fighting to sell the customer another vehicle. In GM's case the problem is compounded as in General the media for some reason don't like GM vehicles and they are often glorifying the other vehicles in a test, especially if it is German.
Volkswagen see themselves a premium brand; although most people don't see the company in the same way, general opinion is 'as close as'. Maybe come 2010 VW will be seen as a premium brand. In comparison GM have stepped up to the mark with the OPEL Insignia. Given that VW have been aiming for a premium level brand since the mid 90's, I think it is safe to assume that it will take about 15 years for OPEL to be seen as a premium level brand. Is this what OPEL are aiming for? I'm positive about it. OPEL has to stay competitive to VW and also need to distance themselves from Chevrolet. As a side note my concern is where this will leave GM's current European premium brand; Saab. With fuel prices going ballistic the next two vehicles due in Saab's revitalisation program is an SUV and an executive size vehicle; neither can be best described as economy driven vehicles. However in defence the 9-5 is very much due renewal and it will be very interesting to see how GM's attention to quality will be communicated through the brands future products.
Carl-Peter if by reading between the lines of your latest post that you mean GM will be striving for excellence in perceived quality, where materials may not necessarily cost more but will feel superior to products use by your competitors; then I would see this as very intelligent marketing. Providing that the money saved enables GME to give the same 5 Year/100,000 mile warranty that GMA offers, then I think it will do wonders for all GM's products in Europe.
Kind regards
Anthony
Gereon (Germany) said:
"I think it is safe to assume that it will take about 15 years for OPEL to be seen as a premium level brand."
Hi Anthony,
I don't think so, that GM tries to establish Opel as a premium-brand. Opel already attempted to enter the premium-segment decades ago with large vehicles like the Admiral (which even was equipped with a beefy V8 from GMNA), Diplomat or Senator. Opel made its money all the years with midsized- and compact cars, for that reason the large vehicles had been dropped finally. The last one, the Senator, was phased out in 1996, if I remember correctly, whereas those sedans all have been excellent vehicles.
I think Opel will remain a volume-brand, but with a stronger focus on top-notch technology and quality. However, in comparison to VW, Opel delivers much more value for the money. Chevrolet Europe (over here sourced by GM DAT, except the HHR) I wouldn't underestimate. Did you know, that this brand performed better at the 2007 quality-report from the large Auto-Bild car-magazine than ANY German brand? My wife is driving a 2006 Kalos (Aveo) and is very satisfied with it. It delivers a smooth ride, the gaps around the body and the interior fit-and-finish is on par with anything else sold over here, which partly is much more expensive than this car.
Gereon (Germany) said:
"Someone who pays a premium for their vehicle will have there dealer strip the car until the mechanic finds that faint rattle."
Anthony,
I would like to add the following. A constant noise or rattle also can be very annoying for people, who are driving a car below the premium-segment. I think the main-factor is the frustration, if you are paying a premium-price and later you get the impression, that the quality isn't premium. One personal example: My uncle encountered much more serious issues with his Mercedes E-Class, than I did with my 2001 Chevy (Olds) Alero, whereas this Mercedes at least did cost twice as much like my car. My uncle had to deal with TOTAL defects of the engine, the automatic transmission and the electric sunroof. In addition, the electric systems in the dashboard failed successively. In contrast, at my car only the front brake discs had to be changed prematurely (twice), whereas this didn't prove as super expensive. Other (minor) repairs: sensor for the fuel-level (tank), the shifter and the relay (as a recall-action) for the turn-lights had to be replaced. That's it. Not too bad, after more than 7 years and 82.000 miles, as I believe.
Thomas Dieckmann said:
Hello,
the quality experience can be divided into several layers, is similar to "Maslov's hierachy of needs". If you have fulfilled the requirements of a base level, expectation rise to the next level:
First of all you expect that your car does not fall apart, for example by rusting. Then you expect it is not breaking down, always reliably bringing you to your destination. On the next level your expectation is about never needing to visit your dealer unplanned inbetween service intervals and the current top level is formed by something I would call "quality impression": It is the feeling about quality if you see & enter the car (but not knowing it it really is quality). Some companys discovered this top-level before they solved problems on the next lower levels. However, I am sure customer expect good performance on all these levels.
regards
Thomas